THE NORTH of England could become more prosperous and attractive to investors if its cities shouted louder about the higher standard of living that exists outside of London, according to the new northern chairman of KPMG.
New research from the accountancy firm highlights the importance to nations of economically strong and well-functioning second-tier cities that provide educational, cultural and occupational opportunities.
But the Magnet Cities report warns that many UK cities are struggling to compete against the “super-strength pull” of the capital and have seen their economies shrink in spite of growing populations.
In an interview to mark his appointment, Chris Hearld pointed to the findings of the KPMG study to argue for a more concerted effort among northern cities to promote the region’s strengths.
He also urged greater devolution of political decision making to help build a stronger economy in the North.
And he welcomed the widening acceptance that cities outside of London have a role to play in rebalancing the UK economy and creating growth in the future.
Mr Hearld told The Yorkshire Post: “What really drives economic development in our experience is creating an environment that wealth generators want to be part of and that will attract business and investment and employment behind it.
“That’s really a reversal of conventional thinking which is to build an enterprise zone, offer business rates relief and attract business and the people will come to the jobs.
“We are saying it works the other way around. To create an environment that’s attractive to those people needs local decision making because those people know what’s right in a local market.”
Mr Hearld, 43, said northern cities “can’t afford to be shy” about their attributes “in a competitive world that’s trying to attract the best people to come and live and work”.
His boss, Simon Collins, the UK chairman of KPMG, last week warned that owning a home in London was fast becoming “a fairytale for all but society’s wealthiest”.
Mr Hearld said businesses, professional services firms and local government should be more explicit about the fact it is cheaper to do business in the North.
He added: “That also means it is a better place to grow a family, to buy a house, to send your kids to school.
“That has got to be positive for people starting out on a career ladder.”
He insisted that the message was not about cheaper labour.
Mr Hearld said: “It’s about overall package. It’s about the standard of living. Of course, the salaries are lower, we all know that. But equally the cost of living is significantly lower. It is demonstrable.
“I think all the northern cities should be making that point.”
Mr Hearld questioned whether the business community and local government are doing enough to keep hold of the top talent coming out of Leeds’ universities.
He said: “That’s relevant for us as an employer but it’s also relevant because we are looking at an economy that can create the clients of tomorrow for us.”
Mr Hearld said “top marks” for the Leeds Arena and the Trinity and Victoria shopping centres, “but they’re done now, so what’s the next thing?”.
In his new role, which is effective from tomorrow, he will lead KPMG’s largest operation outside of London, including its Manchester, Liverpool, Preston, Leeds and Newcastle offices.
The region contributes annual fee income of £205m and employs more than 1,700 staff and 60 partners.
Mr Hearld, who was born in York, joined KPMG in 1992 and has been an audit partner for nearly ten years.
He was named head of the Leeds office in May 2012.
Mr Hearld predicted that the private company market would be very important for the firm in the next few years.
KPMG hired Ian Beaumont from mid-tier accountancy firm BDO to spearhead its assault on the mid market sector. He starts his new role tomorrow.
“We have got to be strong in that market if we are going to be strong as a firm,” said Mr Hearld.
KPMG could roll out more business hubs
Chris Hearld hinted at new office openings for KPMG in the North.
The Big Four accountancy firm opened a small office in Chester in the summer.
“That’s a model we could look to roll out elsewhere,” he said.
The office has no permanent staff; it is used by employees from KPMG’s office in Manchester to meet clients in the region.
KPMG set up the business hub in the University of Chester’s Riverside Innovation Centre with the aim of supporting and working more closely with companies large and small across Chester and North Wales.